Energy Transfer 2015 Annual Report Download - page 41

Table of Contents
• the right, if any, of the security to vote on matters relating to the Partnership, including matters relating to the relative rights, preferences and privileges
of such security.
Please see “We may sell additional limited partner interests, diluting existing interests of Unitholders.” above.
The control of our General Partner may be transferred to a third party without Unitholder consent.
The General Partner may transfer its general partner interest to a third party without the consent of the Unitholders. Furthermore, the general partner of our
General Partner may transfer its general partner interest in our General Partner to a third party without the consent of the Unitholders. Any new owner of the
General Partner or the general partner of the General Partner would be in a position to replace the officers of the General Partner with its own choices and to
control the decisions taken by such officers.
Unitholders may be required to sell their units to the General Partner at an undesirable time or price.
If at any time less than 20% of the outstanding units of any class are held by persons other than the General Partner and its affiliates, the General Partner will
have the right to acquire all, but not less than all, of those units at a price no less than their then-current market price. As a consequence, a Unitholder may be
required to sell their Common Units at an undesirable time or price. The General Partner may assign this purchase right to any of its affiliates or to us.
The interruption of distributions to us from our operating subsidiaries and equity investees may affect our ability to satisfy our obligations and to make
distributions to our partners.
We are a holding company with no business operations other than that of our operating subsidiaries, including Sunoco Logistics. Our only significant assets
are the equity interests we own in our operating subsidiaries and equity investees. As a result, we depend upon the earnings and cash flow of our operating
subsidiaries and equity investees and any interruption of distributions to us may affect our ability to meet our obligations, including any obligations under
our debt agreements, and to make distributions to our partners.
A reduction in Sunoco Logistics’ distributions will disproportionately affect the amount of cash distributions to which we are entitled.
Through our ownership of equity interests in Sunoco Partners, the holder of the incentive distribution rights in Sunoco Logistics, we are entitled to receive
our pro rata share of specified percentages of total cash distributions made by Sunoco Logistics as it reaches established target cash distribution levels as
specified in the Sunoco Logistics partnership agreement. We currently receive our pro rata share of cash distributions from Sunoco Logistics based on the
highest incremental percentage, 48%, to which Sunoco Partners is entitled pursuant to its incentive distribution rights in Sunoco Logistics. A decrease in the
amount of distributions by Sunoco Logistics to less than $0.2638 per common unit per quarter would reduce Sunoco Partners’ percentage of the incremental
cash distributions above $0.0958 per common unit per quarter from 48% to 35%. As a result, any such reduction in quarterly cash distributions from Sunoco
Logistics would have the effect of disproportionately reducing the amount of all distributions that we receive from Sunoco Logistics based on our ownership
interest in the incentive distribution rights in Sunoco Logistics as compared to cash distributions we receive from Sunoco Logistics on our General Partner
interest in Sunoco Logistics and our Sunoco Logistics common units.
Sunoco Logistics is not prohibited from competing with us.
Neither our partnership agreement nor the partnership agreements of Sunoco Logistics prohibits Sunoco Logistics from owning assets or engaging in
businesses that compete directly or indirectly with us. In addition, Sunoco Logistics may acquire, construct or dispose of any assets in the future without any
obligation to offer us the opportunity to purchase or construct any of those assets.
Cost reimbursements due to our General Partner may be substantial and may reduce our ability to pay the distributions to Unitholders.
Prior to making any distributions to our Unitholders, we will reimburse our General Partner for all expenses it has incurred on our behalf. In addition, our
General Partner and its affiliates may provide us with services for which we will be charged reasonable fees as determined by the General Partner. The
reimbursement of these expenses and the payment of these fees could adversely affect our ability to make distributions to the Unitholders. Our General
Partner has sole discretion to determine the amount of these expenses and fees.
Unitholders may have liability to repay distributions.
Under certain circumstances, Unitholders may have to repay us amounts wrongfully distributed to them. Under Delaware law, we may not make a distribution
to Unitholders if the distribution causes our liabilities to exceed the fair value of our assets. Liabilities
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